How to Accelerate Open Innovation Initiatives with Disruptive Technology

Global companies focused on open innovation can accelerate corporate innovation strategies by partnering with a select set of early stage, disruptive technology providers. The result can accelerate open innovation initiatives to fulfill existing market needs or to access new market opportunities while leveraging intellectual resources from outside your organization.

The benefit to discovering and leveraging disruptive technologies can enable open innovation practitioners to leapfrog competitor strategies and offerings while providing a “time-to-market” advantage in your industry or marketplace. In addition, the timing for this approach is ideal because the dominant trend and business models now being executed through forward thinking CEOs of disruptive technology providers is to incorporate “your voice”.

Gone are the days of “if we build it, they will come”, and the motivation to incorporate your voice into a product and technology roadmap also provides the foundation for a longer term collaborative partnership. Both parties win because the disruptive technology provider is receiving highly valuable inputs into what customers actually need over the partnership phases. On the other hand, open innovation practitioners can accelerate the development and release for either an enhanced version of existing products or a new set of new products or solutions.

Open innovation practitioners who leverage intellectual resources from disruptive technology providers can gain new insights on how these technologies may be applied to meet their goals. Many times the open innovations practitioners are not fully aware of the latest offerings and capabilities of available disruptive technologies. The translation of technologies into possible product or solution concepts also can be accelerated through the provider’s domain expertise.

Open innovation basics

Much has already been written regarding the importance of having discipline within your own corporation to effectively leverage open innovations initiatives. This includes having a centralized open innovations group and culture, led by a strong executive sponsor engaged in the innovation strategy of the organization. The leader will help identify and prioritize open innovations initiatives while understanding and adopting technology to meet open innovations goals. A proven set of processes, tools, and techniques for evaluating and moving ideas into prototypes and, eventually, products is also a requirement.

This needed discipline is summarized well by Hitendra Patel, Managing Director of the IXL Center, a leading center for innovation, excellence and leadership.

— Organizations that have disparate silos end up evaluating cool technologies that don’t specifically apply to an open innovation initiative. The result usually is a disconnect between how the technology was evaluated and what business value could bring towards a specific initiative. Under these conditions, information is rarely shared across silos and executive sponsorship would also be lacking.

Another key insight provided by Mr. Patel is that corporate open innovations teams should not only evaluate the technology. Equally important is evaluating the people that will be involved to determine if there can be an effective partnership established with the disruptive technology partner. The relationship factor is as equally important as the technology fit:

— Establishing a trusted working partnership allows both parties some breathing room if and when things get off-track.

The disconnect in finding an ideal match

There are challenges being able to effectively find each other… Open innovations practitioners may not have the bandwidth or expertise to deal with the challenge of finding the very best disruptive technology offerings that can provide the highest value proposition to their open innovation initiatives. Disruptive technology companies many times lack the ability to penetrate and effectively communicate to senior open innovation executive levels what their value proposition is and how a partnership can be worthwhile moving forward.

As an example, a corporate vice president of health innovation at a Fortune 50 health care company explained:

— About 1/3 of all the disruptive technology companies we look at to address our open innovation initiatives are not effective in communicating their product positioning and value proposition. There has to be a clear mapping between the initiative and the solution value proposition.

This is not uncommon and most likely due to a lack of preparation and planning leading up to the meeting. Open innovation executives are eager to understand how well the presenting company understands their initiative while communicating how a unique solution can be offered. The executive then adds:

— I’m sure we have passed on some of the best technologies and solutions because of this disconnect. In addition, due to our time constraints, there is no second chance to take a second look.

Mistakes we learnt from

The following mistakes have been observed while also learnt from when disruptive technology companies reach out to corporate open innovations teams…and vice versa:

Corporation

Lack visibility into ideal disruptive technology company offerings.

“Not-invented-here” syndrome… resistance to change.

Separate silos evaluating “cool technology” not mapped to an open innovation initiative.

No central open innovation leader or processes.

Disruptive Technology Providers

Lack the skills to properly target and connect with open innovation executives.

Poorly communicating their value proposition.

Too much emphasis on the technology and not enough on the partnership

There is also a tendency for disruptive technology providers to present their solutions as being the center of the universe. Many fail to understand that there may be a requirement to leverage, extend and complement an existing ecosystem of products and technologies that may already be integrated into the open innovations organization. In addition, understanding the possible effects to an upstream and downstream supply chain needs to be taken into consideration as well.

Recommendations and alignment guidelines

Open Innovations Practitioners should designate a team lead that can develop the skills necessary to identify, qualify and evaluate disruptive technologies that map well to your open innovation priorities. Developing these skills will broaden your reach beyond efforts provided by outside consultants specializing in “technology hunting”.

Typically, consulting firms providing these specific services are in the habit of issuing requests for information, (RFI’s) to sets of disruptive technology providers and can sometimes overlook ideal innovation options. This is because they raise competitive issues, are too narrowly focused and the possible link to their capabilities is not clear.

Many of the best disruptive technology companies often ignore RFI requests they perceive were drafted with competitor input, already having the inside track. “The key”, says Jay Paap a global consultant with several decades experience in helping firms set up Open Innovation programs, is to develop the skill of translating your need into a generic description of the problem, not a request for an expected solution.

By reaching out directly to the disruptive technology companies with a clear but broad need statement, you will find that they will be much more responsive and open to collaborating and will provide oftentimes surprising solutions to your problems.

Disruptive Technology Providers should acquire or develop the expertise needed to proactively reach out and connect to senior level open innovations practitioners.

Do your homework before reaching out! You usually can find out quickly what may be the key corporate initiatives by looking through the “investors” section of their website. Here you will find online analysts and shareholder briefings, investor conference presentations that provide a good idea what are the priorities.

Begin your conversation by acknowledging what you have learned about their priorities while effectively communicating how your value proposition leverages these priorities. Remember, it’s not just about your technology…open innovation executives are also evaluating you in terms of a working partnership. Once you have established trust, are engaged in a dialogue, the open innovation executives will confirm specifically, what they are planning to accomplish.

An ideal match

A shining example of a disruptive technology company that excelled at connecting with big pharma’s open innovations executives is Wingu, led by Nick Encina and Brian Gilman. Wingu successfully attracted and “found their match” with the top open innovation leaders within top global pharma companies. Wingu helps global pharma companies deal with today’s complexities of producing drugs on a worldwide basis by coordinating across multiple vendors. Wingu was the “buy” alternative, Vs. “make” internally by big pharma. Global Pharma was trying to address these challenges through their own internal technology and software development teams. Wingu is uniquely positioned to address major challenges associated with today’s model of outsourcing pharmaceutical research processes where today the market is highly fragmented and decentralized. Wingu’s positioning was further strengthened as big pharma’s “voice” was included in the first major release of the Wingu platform. By incorporating the customer’s voice and DNA into the initial set of product releases, Wingu has been able to establish a strong personal relationship with top executives and early brand loyalty – a priceless commodity.

Concluding remarks

Once an ideal match is made, both disruptive technology providers and open innovation teams can achieve both short and long-term ROI objectives. Open Innovation practitioners make better technology and product investment decisions by formalizing and growing their internal scouting programs. An effective process can be tailored for exploring opportunities in emerging technologies and markets, strengthening in-house skills, while taking more entrepreneurial risks.

About the authorRobert DiLoreto is Managing Partner for Chasm Innovations, a business development and strategic consulting firm. Robert has over 20 years building major markets for disruptive technologies in the US and internationally. Chasm Innovations helps disruptive technology clients validate, position and partner with open innovation executives within Global 2000 companies. Robert leverages a process he developed named “Initiatives-Selling” to proactively engage with “C-Suite” executives. The process first identifies the major initiatives that have open innovation sponsorship, followed by the ability to communicate a unique value proposition and partnership strategy, targeting the initiative.

Valuable insights and analysis of what company with a Disruptive technology’s dilemmas and the disconnects of the big global market stake holders. For 20 years, I thought I was a business failure for not able to get traction with my invention and products.

Norman Kwan

Mark Montgomery

A good article with one exception, and it’s often fatal– not much discussion of the real problem with open innovation, which is that it’s often conducted by the same individual (s) responsible for competitive intelligence. When combined with the structural problems with our IP and legal system, the result is quite often very sophisticated reverse engineering, IP theft, and/or free education at great expense to the start-up that results in acquisitions of competitors, construction of obstacles to the start-up–not just in the subject, but also partners in that industry and as is the case in my industry–other industries.

While it certainly depends on the culture of the individual company involved, and the individuals involved–ethics always do, open innovation is quite often just a front for corporate espionage. I’ve confirmed this many times personally and I am among the most experienced– there is no question whatsoever.